Amazon is pushing back against Saks Global’s proposed bankruptcy financing plan, urging a federal judge to reject it. In court filings, Amazon contends that the struggling department store “burned through hundreds of millions of dollars in less than a year” and failed to uphold its end of a strategic partnership agreement.
The collaboration, inked when Saks acquired Neiman Marcus for $2.7 billion in December 2024, saw Amazon invest $475 million. This investment was predicated on Saks making its products available on Amazon’s platform and leveraging Amazon’s technological and logistical expertise. However, Amazon’s attorneys stated in a filing that “That equity investment is now presumptively worthless,” highlighting Saks’ alleged consistent budget overruns, rapid depletion of funds, and accumulation of substantial unpaid invoices to its retail partners.
As part of the original agreement, Saks launched a dedicated “Saks at Amazon” storefront on Amazon’s e-commerce site, featuring a selection of luxury fashion and beauty items. Furthermore, Saks committed to paying Amazon referral fees for Saks-branded goods sold through the platform, with a guaranteed minimum payment of $900 million over eight years.
Amazon argues that Saks’ proposed bankruptcy financing plan is detrimental to its interests and those of other creditors. The e-commerce giant asserts that the plan imposes new debt on portions of the Saks corporation and demotes Amazon’s repayment priority, thereby diminishing the potential recovery amount during bankruptcy proceedings. Amazon has indicated that while it hopes for a resolution, it may pursue “more drastic remedies” if its concerns are not addressed, potentially including the appointment of an examiner or trustee.
During a recent hearing, a U.S. Bankruptcy Court judge permitted Saks to access $1.75 billion in new bankruptcy financing, acknowledging the company’s claim that it faced imminent liquidation without it. A ruling on Amazon’s specific request to reject the financing plan is still pending.
The acquisition of Neiman Marcus by Saks attracted a diverse range of investors, including prominent figures from the technology sector. For Amazon, the deal represented a significant opportunity to expand its presence on its expansive webstore, a strategic move aimed at attracting high-profile brands and enhancing its luxury offerings. This engagement also hinted at Amazon’s broader ambition to deepen its involvement in the physical retail space, a sector where it has experimented with various concepts over the years.
Amazon’s history includes similar strategic investments. In 2022, the company acquired a 2% stake in Grubhub, which included provisions for exclusive perks for Prime members. This investment was later expanded, with Amazon increasing its stake to up to 18% in 2024.
Amazon has declined to comment beyond its court filings. Saks has not yet responded to a request for comment.
Meanwhile, software giant Salesforce also became a minority shareholder in Saks during the Neiman Marcus acquisition, albeit with a smaller stake than Amazon. It remains unclear if Salesforce intends to challenge the bankruptcy financing plan.
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